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The Jewel Rule

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by:
Mark Gordon
Business Observer

Real-estate developer Tom Mannausa took a rare step for a 19-year-old college kid back in 1977 to jumpstart his career.

That’s when Mannausa sold his silver 1969 Corvette, a gift from his dad. Mannausa used the money, $3,250, to buy a student rental property in Kalamazoo, Mich., where he was enrolled at Western Michigan University. He soon used the proceeds he made from that house to put down payments on four more local homes.

That was the beginning of what’s now a 35-year real-estate development career. Mannausa’s companies have developed 900 condos and homes in the region, in addition to a few million square feet of retail and office space. Mannausa has personally been the lead developer for at least 50 projects, and he partnered with prominent homebuilder Pat Neal on other projects for nearly 20 years.

But Mannausa’s career is now marked with a new purpose: To play a supporting role in the post-recession rejuvenation of downtowns throughout the Gulf Coast. Examples of new downtown projects dot the region. That goes from a $20 million renovation and expansion of a hotel on prime real estate in Naples to the condo conversion of a Clearwater office building. Another example: an abandoned 87-year-old hotel in downtown Bradenton, where Al Capone and Babe Ruth supposedly once stayed, is being turned into a Hampton Inn.

The rejuvenation project Mannausa is behind is called The Jewel.

It’s a 17-story luxury condo tower planned for Main Street and Gulfstream Avenue — the cultural and arts hub of downtown Sarasota. The structure, at a potential 236 feet, would be the tallest downtown building. It would also be one of the first major residential projects built downtown in five years. “And new is new,” says Mannausa. “It’s never been lived in before. It’s new countertops. New bathrooms. New everything.”

‘Moving along’One city in particular that illustrates the recent transformation of Gulf Coast downtowns is Fort Myers.
The city unveiled a new water basin around the Caloosahatchee riverfront in early December, a $5.3 million project. Don Paight, executive director of the Fort Myers Community Redevelopment Agency, says this project was a necessary environmental fix for storm water and other wastewater pollutant issues.

But the project, Paight says, which was paid for mostly through a downtown tax increment financing district (TIF) that collected about $4.5 million, isn’t only functional for excess water. It also has walking spaces, room for festivals and its own sound system. “It’s a very attractive water basin with nice features,” says Paight, “but it’s also intended to attract new development.”

Paight says the plan, so far, is working. Five new restaurants have opened in the area around the basin in the last three months, he says, and retail vacancies are beginning to fill up. “Things are moving along,” says Paight. “Despite the economy, downtowns on Fridays and Saturdays are busy again.”

Another factor in the city’s downtown plan is to partner with a hotel developer for a project that would be built next to the Harborside Events Center. City officials have been in talks with Sarasota developer John Meshad on that project. Meshad’s JWM Management has owned and built more than 1 million square feet of retail and office space in Sarasota and Atlanta. The company also developed the St. Regis hotel in Atlanta.

Meshad says plans are in the early conceptual stages, and he hasn’t officially committed to building the hotel. He says he wouldn’t even consider a hotel there without the events center, but with it, he hopes a project makes sense both for him and Fort Myers. “They have been struggling with booking events there because they don’t have a hotel,” says Meshad.

Prized location The Jewel, meanwhile, will have 18 units that range in price from $1.25 million to $4.1 million. The project will feature LED lights inside and outside, and include two floors of retail space. The third floor of the building will be an amenity deck with a yoga room, 20-meter pool, sauna, synthetic putting green and tennis court.

“Our amenity floor is absolutely spectacular,” says Mannausa. “It will be very country club in appearance.”

The Jewel sales office opened in November and 16 out of 18 units were under reservation by Feb. 13, Mannausa says. A reservation included a deposit of $50,000 for one of 10 half-floor units or $100,000 for one of eight full-floor units. The buyers, adds Mannausa, make up a diverse group of active baby boomers.

Mannausa says he expects to convert those reservations to purchase agreements by April 15. Demolition of buildings on the property could then begin by July, he says, and the project could take about 16 months to build.

Mannausa made his first financial commitment to The Jewel in December 2010, when he bought a vacant lot at the corner of Gulfstream Avenue and Main Street for $870,000. He bought the land in a short sale from IberiaBank, which had taken over the property from the estate of local developer Samuel Hamad.

The price, for a prized location, was certainly recession-era cheap. Yet even then the normally optimistic Mannausa was guarded about the project. “The risk was diminished, but it was still a big investment,” he says. “It’s been a long time since anything new has been developed.”

Mannausa moved ahead with the project in spring 2012, when he bought two adjacent properties: the Sports Page Bar & Grille and Living Walls Furniture & Design. He paid just less than $3 million for those stores, which will likely move to other downtown locations.

More projects Validation came quickly for Mannausa.

He says he received multiple offers to sell the entire development by the fall, when word of the project spread in Sarasota real-estate circles. Three offers were in excess of $10 million, he says. But he passed, saying he wanted to see The Jewel through to completion.

The Jewel is noteworthy for its size and location, but the renewed development interest in downtown Sarasota stretches further. Other examples include The Queue townhouses on Ringling Boulevard and the Homes of Laurel Park, a 26-home project just south of Main Street.

Several successful entrepreneurs, moreover, have been buying property downtown, both for future investments and potential real-estate development projects. Canadian businessman Lou Donato, for example, bought five buildings with more than 23,000 square feet of retail space and a vacant lot on Main Street last year. Donato, who owns two restaurant chains in Canada, paid $4.3 million for the properties.
Downtown Sarasota resident Jesse Biter, who sold a $15 million auto sales software firm in 2010, is also buying properties in his adopted hometown. Biter’s downtown purchases, going back through late 2011, include retail space on the ground floor of the Palm Avenue parking garage; the former Century Bank building on Fruitville Road, now home to the HuB, a business incubator, and Biter’s new firm, Dealers United; and two buildings on Main Street.

Biter spent more than $8 million on those acquisitions. His goal with some of the properties is to eventually build apartment buildings that are priced for young professionals.

“I’m very excited about what’s going on downtown,” says Biter. “I want to invest in downtown. I’m bullish on the area.”